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Mortgage Dictionary


Terminology, definitions, explanations, and documents for business professionals in the mortgage lending and mortgage risk management industries, as they are used on LendingRisk.com.

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D

Debt Consolidation Loan
A Debt Consolidation loan indicates that proceeds from the loan are used to finance the replacement of multiple loans with a single loan. Typically, the new loan features a lower monthly payment and a longer repayment period. The debt consolidation loan is also referred to as a consolidation loan.

See Cash-Out Refinance
See Loan Purpose Type
See Mortgage Loan Purpose Type Overview
See Refinance

Debt to Income (DTI) Ratio
A borrower's Debt to Income (DTI) is the ratio of monthly debt payments to monthly gross income. In underwriting a mortgage loan it is necessary to determine the borrower's ability to repay a loan in accordance with its terms. The borrower's DTI is considered a key indicator of the borrower's ability to repay the loan.

See Borrower Debt to Income (DTI) Overview
See Housing Ratio
See Total Ratio
Default
A failure to meet legal obligations in a mortgage contract. For example, a borrower fails to make the monthly mortgage payment.

See Mortgage Loan Delinquency Overview
Detached (Property Type)
A property type where the primary dwelling for a single family home does not share a wall with the primary dwelling another single family home.

See Attached (Property Type)
See Mortgage Loan Property Types

Detached Condominium
A property type of "Detached Condominium" indicates that the property is a single family home in which the homeowner does not maintain the exteriors of the dwellings to include the yard.

See Condominium
See Mortgage Loan Property Types

Documentation Type
In underwriting a mortgage loan it is necessary to determine the borrower's credit worthiness and the subject property's value. Investors require their sellers and underwriters to document loans in accordance with industry specific standards to ensure loan quality and marketability. The description used for the level of required documentation is the loan's documentation type.

The MISMO Mortgage Application v2.3.1 specification for electronic commerce supports the following loan documentation type values, under the LOAN_FEATURES node, in the LoanDocumentationType attribute of the mortgage application transaction:
  • Alternative
  • FullDocumentation
  • NoDepositVerification
  • NoDepositVerificationEmploymentVerificationOrIncomeVerification
  • NoDocumentation
  • NoEmploymentVerificationOrIncomeVerification
  • Reduced
  • StreamlineRefinance
  • NoRatio
  • NoIncomeNoEmploymentNoAssetsOn1003
  • NoIncomeOn1003
  • NoVerificationOfStatedIncomeEmploymentOrAssets
  • NoVerificationOfStatedIncomeOrAssests
  • NoVerificationOfStatedAssets
  • NoVerificationOfStatedIncomeOrEmployment
  • NoVerificationOfStatedIncome
  • VerbalVerificationOfEmployment
  • OnePaystub
  • OnePaystubAndVerbalVerificationOfEmployment
  • OnePaystubAndOneW2AndVerbalVerificationOfEmploymentOrOneYear1040

These loan documentation types are recognized throughout the mortgage industry and represent various levels of credit risk.

See Mortgage Loan Documentation Type Overview
See Mortgage Industry Standards Maintenance Organization (MISMO)

DTI
In the mortgage industry, DTI is an acronym for Debt To Income Ratio.

See Debt to Income (DTI) Ratio
See Housing Ratio
See Total Ratio

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Terminology, definitions, terms, explanations, and documents for business professionals in the mortgage lending and mortgage risk management industries.